BEIJING (Reuters) - China’s State Development & Investment Corporation (SDIC) is aiming to produce 4 million to 5 million tonnes of ethanol a year in the next three to five years, a company official said on Friday, around double the nation’s current output.
The state-owned firm is seeking to profit from a new policy promoting ethanol use in gasoline across the country.
China said last month it will roll out gasoline with a 10 percent ethanol content in 2020 to boost industrial demand for excess corn stocks and clean up the nation’s polluted air.
China currently produces less than 2.5 million tonnes of ethanol a year, but the new policy could increase demand to 15 million tonnes a year by 2020, according to a Reuters estimate.
“Following the 10 percent mandate, there will be huge, huge space (for growth),” SDIC chairman Wang Huisheng told reporters.
SDIC has already begun construction of its first ethanol plant in Liaoning province in China’s northeast, with 300,000 tonnes of annual capacity, Wang said.
It plans to build another five plants including in Jilin and Heilongjiang provinces, and buy some additional facilities, Guo Zhongjie, SDIC’s director of strategy and development, told Reuters on the sidelines of a briefing.
The five new plants are still awaiting government approval.
State-owned grain trading house COFCO is currently China’s top ethanol producer but SDIC plans to be market leader within five years, Wang said.
SDIC has also hired Yue Guojun, former chief engineer and board chairman at COFCO’s ethanol division.
Reporting by Hallie Gu and Dominique Patton; Editing by Tom Hogue